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Fraser Company will need a new warehouse in seven years. The warehouse will cost $350,000 to build Click here to view Exhibit
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Answer #1

Solution:

1. present value at ten percent = $350,000* Present value of $1 @10% at 7 periods

= $350,000 *0.5132

= $179620

2.present value at seven percent = $350,000* Present value of $1 @7% at 7 periods

= $350,000 *6227

= $217,945

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